EUR/USD struggles to extend its upside above 1.1200 as the ECB is expected to cut interest rates again in September, while Fed’s Chairman Jerome Powell signals an interest-rate cut. Investors await key data releases for the US and Eurozone, impacting the currency pair’s movement.
EUR/USD corrects slightly from 1.1200, the highest level seen in more than a year, in Monday’s European session. The US Dollar remains under pressure as market expectations for a Fed rate cut in September are fully priced in, with the US Dollar Index (DXY) hitting a fresh year-to-date low.
Fed Chair Jerome Powell’s recent speech at the Jackson Hole Symposium indicates a possible interest rate cut in September, citing concerns about labor market risks and confidence in inflation. Traders are split on the size of the rate cut, with futures pricing data showing possibilities for both 50-basis point and 25-basis point reductions.
Key economic data releases, including US Durable Goods Orders for July and US core PCE inflation data, will influence the USD’s movement this week. Meanwhile, the ECB is expected to cut interest rates in September, with Eurozone HICP data also on investors’ radar for further insights.
Daily Digest Market Movers: EUR/USD Correction on ECB Rate Cut Bets
- EUR/USD trades near a YTD high of 1.1200 as the Euro underperforms amid expectations of ECB interest rate cuts in September and beyond due to economic uncertainties and easing wage growth.
- ECB Chief Economist Philip Lane’s remarks at the Jackson Hole Symposium suggest a need for restrictive monetary policy, despite some progress in inflation.
- Focus on upcoming Eurozone HICP data and German Business Climate reports for further guidance on interest rate moves.
Technical Analysis: EUR/USD Reaches Fresh Swing High at 1.1200
EUR/USD’s bullish reversal is supported by a breakout pattern and RSI momentum, with a target at 1.1275 for Euro bulls.
Euro FAQs
- The Euro is the currency for 20 EU countries, second in trading volume to the USD.
- The ECB in Frankfurt manages interest rates and monetary policy for the Eurozone.
- Eurozone inflation data and economic indicators impact the Euro’s value.
- Trade Balance data releases are also significant for the Euro’s performance.
Stay informed about these key factors to make informed decisions in the forex market and navigate potential impacts on your investments and finances.